International Dispute: U.S. vs. E.U.
The United States has accused the European Union of illegally subsidizing Airbus, an aircraft manufacturer. In response, the E.U. says it’s prepared to sue Boeing for benefiting from illegal subsidies. Both cases would go to the World Trade Organization.
The two sides have operated since 1992 under an agreement allowing Airbus to receive a certain amount of "launch aid" — loans from the British, French, German and Spanish governments to finance the cost of developing new planes. But that arrangement came under strain in the past several years as Airbus passed Boeing in worldwide sales, and the Bush administration escalated the dispute by filing its WTO case in October 2004, prompting an immediate counterclaim by Brussels. Source
Both sides had hoped to avoid what’ss considered a ‘mutually destructive confrontation,’ but since billions of dollars are at stake, a peaceful and litigation-free resolution appears unlikely.
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